Emerging Market Crises and the IMF: Rethinking the Role of the IMF in the Light of Turkey's 2000-2001 Financial Crises

Bogazici University ISS/EC Working Paper No. 02-03

28 Pages Posted: 28 Jul 2002

See all articles by C. Emre Alper

C. Emre Alper

International Monetary Fund (IMF)

Ziya Öniş

Koc University - Department of International Relations

Date Written: July 2002

Abstract

Recurring financial crises in the semi-periphery have raised serious question marks concerning the role of the IMF in the era of financial globalization, particularly in the aftermath of the Asian Crisis of 1997. The present paper attempts to provide a critical and at the same time a balanced perspective on the Fund's involvement in crisis-ridden emerging markets with special reference to the recent Turkish experience. The analysis points towards both the limitations underlying the Fund's approach itself as well as some of the dilemmas faced by the organization in trying to reform the economies of debtor countries given the nature of the domestic political environment in the countries themselves. It is also argued that the kinds of reforms promoted by the Fund are necessarily incomplete in so far as they focus only on the regulatory role of the state, neglecting issues relating to income distribution and longer-term development in the process. Two key conclusions follow. Firstly, crisis-ridden countries need to develop a domestic political base to "internalize" the kind of reforms sponsored by the IMF, which are important in terms of their ability to benefit from the process of globalization. Secondly, the countries concerned need to extend their horizons and develop their domestic capacities in areas such as income distribution and longer-term competitiveness, areas that not traditionally emphasized by the Fund.

Keywords: Financial globalization, crisis prevention and resolution, state reform, external anchors

JEL Classification: O19, E65, F3

Suggested Citation

Alper, C. Emre and Onis, Ziya, Emerging Market Crises and the IMF: Rethinking the Role of the IMF in the Light of Turkey's 2000-2001 Financial Crises (July 2002). Bogazici University ISS/EC Working Paper No. 02-03, Available at SSRN: https://ssrn.com/abstract=318664 or http://dx.doi.org/10.2139/ssrn.318664

C. Emre Alper

International Monetary Fund (IMF) ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Ziya Onis (Contact Author)

Koc University - Department of International Relations ( email )

Rumelifeneri Yolu
Sariyer 80910, Istanbul
Turkey
+90 212 338 1300 (Phone)
+90 212 338 1651 (Fax)

HOME PAGE: http://home.ku.edu.tr/~zonis/

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